Privilege easily suspended, case reveals

THE VULNERABILITY of legal professional privilege to waiver by courts has been highlighted by a recent case in the Victorian Supreme Court. The case, Switchcorp Pty Ltd & Ors v Multiemedia

THE VULNERABILITY of legal professional privilege to waiver by courts has been highlighted by a recent case in the Victorian Supreme Court.

The case, Switchcorp Pty Ltd & Ors vMultiemedia Ltd, emphasises how careful businesses need to be about how they refer to legal advice in any documents or announcements.

The court ruled that an announcement to the Australian Stock Exchange by Melbourne company Multiemedia, which stated that the company’s lawyers had “advised that the plaintiffs claim will not succeed”, had the effect of waiving the professional privilege of all of the advice it had referred to.

“Lawyers would appreciate that you could waive privilege by disclosing advice, but particularly lawyers who don’t practise in litigation may not be aware that it is very easy to do that,” said Scott Krischock, a litigation senior associate at Hunt and Hunt Lawyers.

“You don’t have to distribute the actual letter containing the advice, here we have just a simple statement by the company that its lawyers had advised that the plaintiffs claim would not succeed. Just that bald statement, no reference to the reasons for that advice.”

Kriscock said that letters are often exchanged between parties in a dispute, which include disclosures of legal advice that could also lead to waiver of privilege if they refer directly to the advice.

“So really I don’t think there is an appreciation for just how easily privilege can be waived”, he said.

In this case, he said if the statement had been subtly changed to ensure the attribution of the decision was to the company itself rather than its lawyers, it is unlikely the court would have waived privilege.

Instead, he said the company could state: “I have taken legal advice and based on that legal advice I believe that I have a good defence. That’s a different thing from saying ‘my lawyers have advised me that I have a good defence’”.

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